LPGA TV revenue gets global boost

The growth of the LPGA as an international sports property and
a new agreement with its tournament association led to a record distribution of
television revenue for the 2007 season.

Neither LPGA nor LPGA Tournament Owners Association executives
would disclose the total disbursement, but three tournament sources said their
take was about $50,000 each, roughly double the year before.

The TOA doles out equal payments to its member tournaments and
keeps a portion to help fund operations, according to its tax documents. The
association represents the interests of nearly all of the 33 official money
events on the LPGA schedule.

The LPGA typically completes its payment to the TOA during the
first half of the following year, which is why 2007 data is available now.

The payment comes from rights fees generated by international
and domestic television deals, but LPGA Deputy Commissioner Libba Galloway said
much of the 2007 bump was tied to increases in international rights.

Lorena Ochoa tees off at last year’s
Ricoh Women’s British Open. The
LPGA says Europe could provide
TV revenue growth this year.

“It speaks volumes for the appeal of the LPGA, primarily
internationally, which is where we get most of our rights fees from,” Galloway
said. “A very small portion of the increase came from the United States.”

More than half of the international money annually comes from
Asia. A large portion of the 2007 increase was due to a new agreement in Japan
that runs through 2009.

One smaller contributing factor was a new five-year
revenue-sharing agreement between the TOA and the LPGA that started in 2007.
Under the previous deal, the LPGA kept all revenue up to a certain threshold
before a payment was made to the TOA. The new deal eliminates that threshold,
resulting in an incremental increase for the TOA and its tournaments.

The LPGA has averaged about 10 percent year-over-year growth
in international television revenue since it started selling the rights in
1996. IMG markets the rights internationally.

The tour projected that this year’s TV disbursement will be
about the same as 2007, one tournament director said. The LPGA said it expects
any growth to come primarily from European and Latin American markets.

The total disbursement has grown substantially from a few
thousand dollars a decade ago but still doesn’t cover television costs. Most
tournaments pay about $250,000 to appear on Golf Channel or ESPN, while some
pay upward of $1.5 million for time and production on network TV.

The LPGA is trying to negotiate a new series of network and
cable deals beginning in 2010 that will create a more consistent schedule and
reduce costs to tournaments.